The House GOP decided to use the second day back in session to do what they love best: give presents to Wall Street.
The bill, comically called Promoting Job Creation and Reducing Small Business Burdens Act, combined 11 different bills aimed at weakening Dodd-Frank into one big package.
Keith Ellison (MN-05), in a floor speech opposing the bill, talked about some of its many dangerous provisions:
1.Weakens the Volcker Rule.
This bill undercuts an important part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Volcker Rule was intended to prevent deposit-taking banks from making bets using taxpayer insured funds. Even though the Federal Reserve went out of its way to ease the transition to a safer system, this bill would give mega-banks another two years to sell off certain securities in which they retain ownership rights. And this provision, which almost certainly juices the profits of the mega-banks like Citigroup and JP Morgan, has never been vetted. The public has not even had a day to review this text. How are we supposed to vote on this?
It’s wrong that bills that help Wall Street and multi-national corporations get fast-tracked on day 2 while bills that help working families have been slow-walked for years.
Just last month, Republicans successfully handed Citigroup and the other mega-banks a multi-billion dollar gift by repealing another reform measure known as “Swaps Push-Out,” which was intended to prevent another Great Recession. The repeal of that provision allowed the mega banks continue to borrow from the Federal Reserve lending window – currently at about zero percent interest -- to finance their risky derivatives trading.
2. Weakens Derivatives Provisions.
This bill also includes three other provisions that weaken the Dodd-Frank Wall Street Reform and Consumer Protection Act by taking away authority from the regulators charged with ensuring that everyone plays by the same rules. So, if at some point in the future we find out that our financial system is threatened, our regulators will be unable to take decisive action to fix the problem as they can do today. After witnessing the effect that one type of derivative, the credit default swap, had in spreading the losses from the subprime mortgage market around the world, I’d like to know why our first order of business this Congress is to roll back financial reforms that this Congress deliberatively passed over an 18-month period following the 2008 Financial Crisis.
3. Undermines investor protections.
The bill includes three provisions that have the potential to leave investors worse off than they are today. In one instance, the bill exempts individuals that would broker a merger of a privately-owned company to be exempt from SEC registration. Since this legislation passed in the previous Congress, the SEC took actions making it unnecessary. However, if we pass the bill today, we will undermine a few basic investor protections the SEC retained. For example, the SEC determined that bad actors, such as convicted securities fraudsters, should not be able to take advantage of the carve-out. However, by voting yes, you are saying that it is ok for people convicted of fraud to sell other things – like franchises or the restaurant down the street.
Another provision would allow 75% of all public companies to no longer report their financial statements in computer-readable formats. When everything is online today, and investors rely on computers to crunch the financials of various companies, this bill comes across as a huge step backwards. Ironically, my colleagues on the other side seem to forget that our capital markets only function as well as they do because investors understand the companies they are investing in. Even Republican Congressman Darrell Issa has pressed the SEC to do more on this issue to make company data more investor-friendly – this bill take the opposite approach, and undoes much of the progress the SEC has made. Why would we risk intentionally harming both small companies and investors this way?
If much of this bill reads as if we never had a financial crisis, Title Eleven reads like we never had an ENRON or Worldcom. I am all for private companies compensating their employees with company securities but not if basic financial disclosure documents are not provided. This provision provides up to $10 million in company securities without having to provide the employees certain basic financial disclosures about the company. That’s right, this bill raises the maximum compensation from $5 million to $10 million – which will increase with inflation -- without requiring basic financial disclosures to the employees.
Those benefits should be tangible and real and not subject to any accounting shenanigans. We all remember ENRON where employees were pressured to buy stock options that were completely worthless. Why can’t we enable employees to receive some equity in the company for which they work AND ensure workers get accurate financial disclosure forms?
Republicans have brought this complex, eleven-bill package to the floor under suspension of the Rules, denying members the opportunity to offer amendments and have a robust fair debate. Just last month, that strategy led to the repeal of the “swaps push-out” rule, a crucial reform in Dodd-Frank. As this bill makes clear, the Republican strategy of jamming complex legislation through Congress will only continue, depriving the minority and the American public of the chance to provide meaningful input during the legislative process and threatening the provisions we put in place to protect our economy from another devastating financial crisis.
The bill, called up in suspension, required 2/3 for passage. It did not achieve that, fortunately. The final vote
was 276 to 146. Only 1 Republican voted against it: Walter Jones (NC-03). 35 Democrats voted with Republicans.
Here are the 35 Democrats:
Brad Ashford (NE-02)
Ami Bera (CA-07)
Don Beyer (VA-08)
Sanford Bishop (GA-02)
Julia Brownley (CA-26)
Cheri Bustos (IL-17)
John Carney (DE-AL)
Gerry Connolly (VA-11)
Henry Cuellar (TX-28)
John Delaney (MD-06)
Suzan DelBene (WA-01)
Elizabeth Esty (CT-05)
Bill Foster (IL-11)
John Garamendi (CA-03)
Gwen Graham (FL-02)
Jim Himes (CT-04)
Hank Johnson (GA-04)
Derek Kilmer (WA-06)
Ron Kind (WI-03)
Rick Larsen (WA-02)
Dan Lipinski (IL-03)
David Loebsack (IA-02)
Sean Maloney (NY-18)
Patrick Murphy (FL-18)
Scott Peters (CA-52)
Collin Peterson (MN-07)
Jared Polis (CO-02)
Mike Quigley (IL-05)
Raul Ruiz (CA-36)
Bobby Rush (IL-01)
Kurt Schrader (OR-05)
David Scott (GA-13)
Terri Sewell (AL-07)
Kyrsten Sinema (AZ-09)
Albio Sires (NJ-08)
Additional Democrats may have initially voted for the bill, only to change their votes later on to prevent it from reaching the 2/3 threshold. Nancy Pelosi, who released a statement criticizing the bill earlier today, likely pressured them to flip their votes.
There is a deep and despicable cynicism at work in the behavior of many so-called "moderate" or "centrist" Democrats. They will vote with Wall Street every chance they get because they get to accomplish two objectives at the same time: (1) please their donors and (2) lower their "vote with party" score. Such purple district Democrats love being able to talk up a low "vote with party" score and a record of "independence." But that independence normally just means shilling for the rich and the big banks.
Expect them to do this again and again throughout the next two years. Bipartisanship in action.
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